A Bill of Sale is used to protect both the seller and the purchaser in the case of any future issues. Since many purchases and sales between individuals are transacted using cash, it can be hard to prove that an item was received or paid for without proper documentation.

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A Bill of Sale is used to protect both the seller and the purchaser in the case of any future issues. Since many purchases and sales between individuals are transacted using cash, it can be hard to prove that an item was received or paid for without proper documentation.

Witness: Some states require a notarized bill of sale when an individual is selling a vehicle. Check with your local DMV to determine what documents and procedures you need to complete. Even if you don’t need a notary to witness your bill of sale, you may choose to have a third party sign the document to show that he or she observed the buyer and seller signatures.

A bill of sale is a document that verifies your purchase, and therefore your ownership of, a valuable asset such as a car, a TV or other large item. Not only does the bill of sale prove you legally own the item, it may be used to determine how much sales tax you pay. It also releases the seller from liability and protects both buyer and seller from any disputes that may arise over the item in the future. Rules for bills of sale vary from state to state. For example, Michigan does not require a bill of sale when buying or selling a car.

Using a Bill of Sale is recommended even when selling or trading items with friends or family members because of the documents power to show proof of ownership. For example, if a parent gifts or sells their vehicle to their child, the child will need a Bill of Sale to prove their ownership of the car so they can get it registered and insured.